The Future Of Commerce Is With Mobile Payments, Here’s Why
There are several ways to use mobile payments. These methods include Near-field communication (NFC) and in-store and in-app mobile payments. But one of the most important advantages of mobile payments is that they are convenient, safe, and secure. Using them is also a good way to save money and reduce credit card fraud.
In-app Mobile Payments
Mobile payments and transactions have become popular because consumers value convenience. It is estimated that 5 billion people have mobile phones and bank accounts with payment capabilities. This trend has increased financial institutions’ focus on mobile payments and transactions. New mobile applications are popping up daily, allowing consumers to make purchases and pay.
The growing acceptance of mobile payment processing apps has led to many partnerships between big credit card companies and startups.
Another way to make mobile payments attractive to consumers is to tie them to loyalty programs. With mobile payments, a business can increase customer loyalty and encourage in-app purchases. As a result, mobile apps are projected to generate over 613 billion in revenue by 2025.
In-person Mobile Payments
Consumers are embracing new ways to pay with their mobile phones. As a result, the use of digital wallets is increasing astoundingly. The number of smartphone users using in-person mobile payments is expected to reach over 50% by 2025. As a merchant, you should be ready to adapt and offer digital payment options to your customers.
The rise of mobile payments is a result of several factors. First of all, consumers value convenience. The ability to complete an in-person transaction without touching anything is very convenient. It also eliminates the need for a physical receipt. With a touchless payment solution, customers tap their card against the card reader, sending a unique code to the merchant’s mobile device.
With such a rapid increase in mobile payments, it will not be long before more companies offer in-store mobile payment solutions. The rise of mobile payments is already evident in Europe, where payments through mobile phones are becoming more popular. For example, commuters in London can now pay for trains and subways with their mobile devices. A similar idea is being tested in the New York City subway system.
Near-field Communication (NFC)
NFC is a form of two-way communication that allows two devices to read and write data to each other. For example, two Android devices can read an NFC chip to subtract money from the balance written on a card. This new technology will make it easier for consumers to pay with their phones.
NFC has the advantage of being secure compared to other mobile payment methods like Bluetooth and WIFI. Because of the small range of the NFC tag, it is very hard to intercept the signal. An attacker must be physically present in the user’s vicinity or carry a reader. Besides, any attacker could only intercept the information stored on the chip, not the transmitted data.
NFC has been in development for the last decade. But despite its potential, large corporations have struggled to convince consumers to switch to this new payment method. Apple has cited two main reasons for this: cumbersome verification through a pin code and fragmentation of the market. However, some companies are pushing the technology and trying to change this perception.
In-store Mobile Payments
In-store mobile payments are a new retail trend, with rapid growth predicted for the next few years. In the United States, in-store mobile payments are expected to grow at a compound annual growth rate of 40 percent, generating $128 billion in revenue by 2021. Similar trends are occurring in Europe, with ApplePay and AndroidPay being widely used there.
Today, in-store mobile payments are being used by 25% of US shoppers across multiple channels, and by 2022, the global value of mobile payments is expected to hit $14 trillion. As a result, retailers must embrace these payment methods and avoid becoming technology laggards. Some leading retailers are already embracing in-store mobile payments, such as Starbucks, which has made this new payment method part of its in-store experience.
There’s a lot of uncertainty surrounding in-store mobile payments. Technology is not yet ready to meet these demands. Retailers need to embrace mobile shopping and improve checkout processes. However, achieving frictionless checkout is unlikely for the largest retailers.